8) Competition Policy

Content of Chapter

The purpose of European Union Competition Policy and related acquis, is to establish an internal market where economic actors operating in member states compete in equal conditions.

Through competition policy, European Union put into effect restrictive rules for the unlawful limitations on competition in order to enable effective functioning of market economy.  These rules form a system providing continuation of competition in the internal market.  

European Union Competition Policy has rules under two headings;

Rules applicable to undertakings (Anti-Trust)

All agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market are prohibited (TFEU Article 101). In a similar vein, any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it is prohibited as well (TFEU Article 102). Since mergers of undertakings may distort the competition within the internal market by creating or strengthening a dominant position, they are also controlled (Council Regulation (EC) 139/2004).

Rules applicable to Member States

Treaty on the Functioning of the European Union (TFEU) not only prohibits the distortion of competition practices caused by undertakings, but also prohibits the distortion of competition decisions and activities of Member States.

a) State Aids

Any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods is prohibited (TFEU Article 107). Nevertheless, in some circumstances, state aid justified by common interest objectives can be considered compatible with the internal market. The legislation stipulates these exemptions (TFEU Article 107-109 and regulations, guidelines, etc.).   

b) Public Undertakings and undertakings to which Member States grant special or exclusive rights

As a principle, EU competition policy applies to both private and public undertakings. In the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in the Treaty (TFEU Article 106).

Opening Benchmarks

For Competition Policy Chapter, explanatory screening meeting was held on 8-9 November 2005, bilateral screening meeting was held on 1-2 December 2005. Six opening benchmarks were notified for the opening of the chapter to negotiations:

1. Ensuring transparency in the area of state aid by providing a comprehensive inventory of all state aid measures covered by the Association Council Decision No. 1/95 on implementing the final phase of the Customs Union.

2. Providing detailed information on the evolution of capacity in the steel sector and state aid given to each company since 2001.

3. Adopting a state aid law setting out general conditions and rules for authorization, monitoring the implementation and the recovery of state aid, for the purpose of implementing the obligations resulting from existing bilateral agreements between Türkiye and the EU.

4. Setting up an operationally independent state aid authority with the powers necessary for the full application of the state aid rules resulting from existing bilateral agreements. This authority should have the power to authorize state aid schemes and individual aid grants, as well as the power for the recovery of the unlawfully granted aid. Until then, in line with the requirements of the Customs Union Agreement, the adoption of new aid schemes or extension of existing ones should be avoided.

5. Presenting an action plan, accepted by the Commission, with a clear timetable for the alignment of all remaining aid schemes or equivalent measures identified as incompatible with the obligations resulting from existing bilateral agreements between Türkiye and the EU.

6. Adopting all necessary measures to ensure that no steel company benefits from state aid given in breach of the Agreement between the ECSC and Türkiye on trade in coal and steel products. Such state aids given since 2001 could be accepted by the Council under strict conditions to be embodied in a national restructuring programme (NRP); any such restructuring programme should, in order to better meet those strict conditions, be adopted before 1 September 2006.

Progress Achieved

All of the opening benchmarks of the chapter are related to the state aids.

Progress achieved towards opening benchmarks 1, 3, 4, and 5:

As for the first benchmark, although the comprehensive inventory of all state aid measures covered by the Association Council Decision No. 1/95 will be prepared by State Aid Monitoring and Supervision Authority, draft inventory of the currently applicable state aid measures prepared by the Undersecretariat of Treasury was submitted to the Commission on 18 October 2010 and 29 November 2010 in two batches.

Regarding the third and fourth benchmark, Law No: 6015 on Monitoring and Supervision of State Aids prepared by the Undersecretariat of Treasury was adopted on 13 October 2010 and entered into force on 23 October 2010 (Official Gazette No: 27738). The Law also establishes a competent authority for this task which is supported by the institutional structure within the Undersecretariat of Treasury. The staff of the Directorate General and the Board members of the Authority have been appointed.

Within the framework of the capacity building process of the DG for State Aids, the staff of the DG participated in TAIEX activities and EIPA seminars/activities. In the meantime, in-service training activities delivered by the most experienced staff of the DG continue. Besides, the Board has been convening on a regular basis.

Regarding the action plan which constitutes the fifth benchmark, The Law No. 6015 comprises also the time tables related to alignment of all remaining aid schemes or equivalent measures identified as incompatible with the obligations resulting from existing bilateral agreements between Türkiye and the EU. In this context, the draft Action Plan was submitted to Commission on 27 October 2010.

Progress achieved towards opening benchmarks 2 and 6:

As for the second benchmark, within the framework of NRP, detailed information on the evolution of capacity in steel sector and state aid given since 2001 was provided to the EU.

Within the scope of the sixth benchmark, the state aids given in breach of the Agreement between the ECSC and Türkiye were embodied in the NRP and submitted to the Commission in 2006. Following further consultations with the Commission, NRP was updated and submitted to the Commission in June 2009.

Related DG in the European Commission

DG Competition is responsible for enhancing consumer welfare and effective functioning of markets by protecting competition and promoting competition culture.

For further information: 

http://ec.europa.eu/competition/index_en.html